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8-K - FORM 8-K - NAVIGANT CONSULTING INCc62757e8vk.htm
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Exhibit 99.2
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
METRICS SUMMARY
(UNAUDITED)
DISCLAIMER:
The Company strongly encourages investors to read its annual and quarterly filings with the Securities and Exchange Commission (the “SEC Filings”), including the financial statements and risk factors contained therein. Although certain information included in this chart is intended to be identical to information in the SEC Filings, in the event of a conflict between information included in the SEC Filings and in this chart, the SEC Filings should be relied upon. Other information included in this chart represents financial metrics compiled by the Company for internal use in analyzing certain aspects of its business (the “Internal Metrics”). The Internal Metrics represent management’s good faith estimates as of the date of this chart, and the Company makes no guarantee as to either their accuracy or completeness. The Company does not undertake any obligation to update this chart to reflect new information, future events or otherwise.
TOTAL COMPANY
                                                                                         
All numbers in $000s except Per Share, DSO, People data and   2010   2010   2009   2009   2008
percentages   Q4   Q3   Q2   Q1   Full Year   Q4   Q3   Q2   Q1   Full Year   Full Year
Revenues Before Reimbursements
  $ 161,752     $ 153,222     $ 154,617     $ 153,870     $ 623,461     $ 153,051     $ 159,153     $ 157,332     $ 167,212     $ 636,748     $ 727,062  
Reimbursements
    21,188       21,625       17,706       19,680       80,199       20,907       18,210       16,224       15,150       70,491       83,578  
Total Revenues
    182,940       174,847       172,323       173,550       703,660       173,958       177,363       173,556       182,362       707,239       810,640  
Y/Y Growth rate
    5 %     -1 %     -1 %     -5 %     -1 %     -10 %     -10 %     -18 %     -12 %     -13 %     6 %
Q/Q Growth rate
    5 %     1 %     -1 %     0 %     N/A       -2 %     2 %     -5 %     -6 %     N/A       N/A  
 
                                                                                       
Geographic Revenues as % of Total
                                                                                       
U.S. Operations
    88 %     88 %     86 %     84 %     85 %     82 %     84 %     84 %     86 %     84 %     83 %
Non U.S. Operations
    12 %     12 %     14 %     16 %     15 %     18 %     16 %     16 %     14 %     16 %     17 %
 
                                                                                       
Cost of Services Before Reimbursements
    111,797       102,368       102,128       102,230       418,523       103,766       100,545       101,967       110,267       416,545       444,035  
% of Revenues Before Reimbursements
    69 %     67 %     66 %     66 %     67 %     68 %     63 %     65 %     66 %     65 %     61 %
 
                                                                                       
General & Administrative Expenses
    31,347       30,789       29,089       30,460       121,685       28,142       32,500       33,513       34,893       129,048       155,378  
% of Revenues Before Reimbursements
    19 %     20 %     19 %     20 %     20 %     18 %     20 %     21 %     21 %     20 %     21 %
 
                                                                                       
EBITDA (1)
    18,608       20,965       23,400       21,180       84,153       19,013       25,238       17,627       21,752       83,630       124,976  
% of Revenues Before Reimbursements
    12 %     14 %     15 %     14 %     13 %     12 %     16 %     11 %     13 %     13 %     17 %
Adjusted EBITDA (excluding other operating costs (benefit) and severance expense) (1)
    21,201       21,448       24,407       22,016       89,072       25,448       27,653       23,192       25,059       101,352       131,909  
% of Revenues Before Reimbursements
    13 %     14 %     16 %     14 %     14 %     17 %     17 %     15 %     15 %     16 %     18 %
 
                                                                                       
Operating Income
    4,284       14,269       16,885       14,583       50,021       11,603       17,716       9,528       12,884       51,731       88,754  
% of Revenues Before Reimbursements
    3 %     9 %     11 %     9 %     8 %     8 %     11 %     6 %     8 %     8 %     12 %
Net Income
    559       9,223       7,828       6,447       24,057       4,789       8,340       3,385       5,433       21,947       40,057  
% of Revenues Before Reimbursements
    0 %     6 %     5 %     4 %     4 %     3 %     5 %     2 %     3 %     3 %     6 %
Y/Y Growth rate
    -88 %     11 %     131 %     19 %     10 %     -58 %     6 %     -66 %     -50 %     -45 %     20 %
Q/Q Growth rate
    -94 %     18 %     21 %     35 %     N/A       -43 %     146 %     -38 %     -52 %     N/A       N/A  
 
                                                                                       
Net Income Per Diluted Share (EPS)
    0.01       0.18       0.16       0.13       0.48       0.10       0.17       0.07       0.11       0.44       0.83  
 
                                                                                       
Adjusted Net Income Per Diluted Share (excluding the net income impact of other operating costs (benefit), severance expense and non recurring foreign tax elections) (2)
    0.15       0.16       0.17       0.14       0.61       0.18       0.20       0.14       0.16       0.68       0.95  
Shares used in computing income per diluted share
    50,909       50,518       50,264       50,096       50,447       50,018       49,954       49,756       49,449       49,795       48,285  
 
                                                                                       
Balance Sheet
                                                                                       
Cash and cash equivalents
    1,981       5,383       3,000       361       1,981       49,144       13,342       5,132       6,743       49,144       23,134  
Trade accounts receivable, net
    179,058       178,881       162,227       174,690       179,058       163,608       185,129       187,201       188,824       163,608       170,464  
Days sales outstanding (DSO)
    81       86       79       83       81       78       87       91       87       78       73  
Debt
    202,951       199,370       202,549       197,275       202,951       219,375       222,326       239,717       260,522       219,375       232,479  
 
                                                                                       
Share-based compensation expense related to consulting personnel
    1,118       928       1,040       801       3,887       869       955       1,333       1,926       5,083       9,087  
 
                                                                                       
Employee Full Time Equivalent Data (Period End) (3)
                                                                                       
Billable
    1,779       1,652       1,668       1,661       1,779       1,666       1,716       1,778       1,920       1,666       1,931  
Non-billable
    528       508       522       518       528       511       514       535       573       511       577  
Total
    2,307       2,160       2,190       2,179       2,307       2,177       2,230       2,313       2,493       2,177       2,508  
 
(1)   EBITDA and Adjusted EBITDA are non-GAAP financial measures. See accompanying schedule for reconciliation to operating income.
 
(2)   Adjusted EPS is a non-GAAP financial measure and excludes the net income impact from other operating costs (benefit), severance expense and non recurring foreign tax elections. See accompanying schedule for further information regarding non-GAAP financial measures included in this chart.
 
(3)   Employee Full Time Equivalent Data represents full-time equivalent (FTE) employees (adjusted for part-time status).

Page 1 of 4


 

SEGMENT INFORMATION (4)
                                                                                         
All numbers in $000s except Per Share, People   2010     2010     2009     2009     2008  
data and percentages   Q4     Q3     Q2     Q1     Full Year     Q4     Q3     Q2     Q1     Full Year     Full Year  
Business Segment Revenues
                                                                                       
Dispute and Investigative Services
    70,627       71,279       63,867       67,894     $ 273,667       72,160       76,010       76,758       77,496     $ 302,424     $ 356,524  
% of Total Revenues
    39 %     41 %     37 %     39 %     39 %     41 %     43 %     44 %     43 %     43 %     43 %
Business Consulting Services
    78,185       68,894       71,756       66,250       285,085       67,419       65,450       63,393       73,516       269,778       329,550  
% of Total Revenues
    43 %     39 %     42 %     38 %     41 %     39 %     37 %     37 %     40 %     38 %     41 %
International Consulting
    16,046       16,443       18,078       20,797       71,364       21,780       21,279       19,250       17,303       79,612       87,673  
% of Total Revenues
    9 %     9 %     10 %     12 %     10 %     13 %     12 %     11 %     9 %     11 %     11 %
Economic Consulting
    18,082       18,231       18,622       18,609       73,544       12,599       14,624       14,155       14,047       55,425       36,893  
% of Total Revenues
    10 %     10 %     11 %     11 %     10 %     7 %     8 %     8 %     8 %     8 %     5 %
 
                                                                 
Total Company
  $ 182,940     $ 174,847     $ 172,323     $ 173,550     $ 703,660     $ 173,958     $ 177,363     $ 173,556     $ 182,362     $ 707,239     $ 810,640  
 
                                                                                       
Business Segment Revenues Before Reimbursements
                                                                                       
Dispute and Investigative Services
    63,540       64,997       59,737       63,338       251,612       65,359       69,260       70,124       71,903       276,646       324,458  
% of Revenues Before Reimbursements
    39 %     42 %     39 %     41 %     40 %     43 %     43 %     45 %     43 %     44 %     44 %
Business Consulting Services
    68,749       58,406       63,430       57,399       247,984       58,717       58,749       57,883       66,906       242,255       290,257  
% of Revenues Before Reimbursements
    43 %     38 %     41 %     37 %     40 %     38 %     37 %     37 %     40 %     38 %     40 %
International Consulting
    12,760       13,231       14,484       16,145       56,620       17,512       17,266       16,067       15,516       66,361       76,605  
% of Revenues Before Reimbursements
    8 %     9 %     9 %     11 %     9 %     11 %     11 %     10 %     9 %     10 %     11 %
Economic Consulting
    16,703       16,588       16,966       16,988       67,245       11,463       13,878       13,258       12,887       51,486       35,742  
% of Revenues Before Reimbursements
    10 %     11 %     11 %     11 %     11 %     8 %     9 %     8 %     8 %     8 %     5 %
 
                                                                 
Total Company
  $ 161,752     $ 153,222     $ 154,617     $ 153,870     $ 623,461     $ 153,051     $ 159,153     $ 157,332     $ 167,212     $ 636,748     $ 727,062  
 
                                                                                       
Segment Operating Profit (5)
                                                                                       
Dispute and Investigative Services
    23,733       26,738       21,585       25,408       97,464       25,966       30,025       28,369       28,234       112,594       143,870  
% of Revenues Before Reimbursements
    37 %     41 %     36 %     40 %     39 %     40 %     43 %     40 %     39 %     41 %     44 %
Business Consulting Services
    22,722       19,817       23,148       19,017       84,704       18,881       21,763       20,332       23,452       84,428       115,280  
% of Revenues Before Reimbursements
    33 %     34 %     36 %     33 %     34 %     32 %     37 %     35 %     35 %     35 %     40 %
International Consulting
    1,632       1,680       3,663       3,740       10,715       2,661       4,793       4,406       4,176       16,036       22,606  
% of Revenues Before Reimbursements
    13 %     13 %     25 %     23 %     19 %     15 %     28 %     27 %     27 %     24 %     30 %
Economic Consulting
    4,878       5,585       6,273       6,296       23,032       3,402       5,239       4,888       4,644       18,173       14,121  
% of Revenues Before Reimbursements
    29 %     34 %     37 %     37 %     34 %     30 %     38 %     37 %     36 %     35 %     40 %
 
                                                                 
Total Company
  $ 52,965     $ 53,820     $ 54,669     $ 54,461     $ 215,915     $ 50,910     $ 61,820     $ 57,995     $ 60,506     $ 231,231     $ 295,877  
% of Revenues Before Reimbursements
    33 %     35 %     35 %     35 %     35 %     33 %     39 %     37 %     36 %     36 %     41 %
 
                                                                                       
Other Operating Data
                                                                                       
 
                                                                                       
Average Billable Full Time Equivalent Headcount
                                                                                       
Dispute and Investigative Services
    616       627       642       647       633       701       716       764       810       747       820  
Business Consulting Services
    833       703       699       706       735       668       699       735       804       727       836  
International Consulting
    173       189       200       212       193       211       215       233       226       221       208  
Economic Consulting
    133       136       119       114       126       105       104       100       101       102       62  
Total Company
    1,755       1,655       1,660       1,679       1,687       1,685       1,734       1,832       1,941       1,797       1,926  
Average Bill Rate (excluding success fees)
                                                                                       
Dispute and Investigative Services
    290       296       300       292       295       282       280       276       278       279       284  
Business Consulting Services
    222       219       217       218       219       223       215       210       219       216       223  
International Consulting
    288       280       259       263       271       267       259       239       233       248       294  
Economic Consulting
    382       375       385       367       377       342       347       344       343       344       332  
Total Company
    267       267       266       264       266       260       255       250       252       254       260  
Average Utilization (based off 1,850 hrs)
                                                                                       
Dispute and Investigative Services
    74 %     72 %     69 %     75 %     72 %     75 %     74 %     72 %     73 %     74 %     78 %
Business Consulting Services
    79 %     79 %     81 %     80 %     80 %     79 %     79 %     75 %     77 %     77 %     80 %
International Consulting
    55 %     54 %     60 %     65 %     58 %     67 %     68 %     61 %     67 %     66 %     69 %
Economic Consulting
    72 %     69 %     76 %     90 %     76 %     76 %     81 %     87 %     85 %     82 %     96 %
Total Company
    74 %     73 %     73 %     77 %     74 %     76 %     76 %     73 %     75 %     75 %     79 %
 
(4)   During the first quarter of 2010, the Company made organizational changes in its business which resulted in the formation of additional operating segments and the repositioning of certain service offerings between the segments. Prior year comparative segment data has been restated to be consistent with the current presentation.
 
(5)   Segment Operating Profit is a measure of profit used by management and excludes certain expense amounts not allocated to the specific reporting segments.

Page 2 of 4


 

NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
RECONCILIATION OF NON GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(UNAUDITED)
Non-GAAP Financial Information
This metrics summary includes certain non-GAAP financial measures as defined by the Securities and Exchange Commission. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles (GAAP) are included in this summary. During 2009, the Company incurred significant severance expense as staffing levels were adjusted to market demand and Navigant executed its strategic refresh initiative involving the redeployment of certain resources. The Company also continues to be impacted by office consolidation costs and benefits due to its real estate initiatives including the impact of closing certain offices and changes in market conditions associated with expected sublease proceeds. During the quarter ended September 30, 2010, the Company recorded a non recurring benefit from a tax election related to certain of its foreign entities. During the quarter ended December 31, 2010 the Company recorded an impairment on its intangible assets relating to its International Consulting segment. Adjusted EBITDA and adjusted operating income excludes the impact of other operating costs (benefit) and severance, and adjusted earnings per share excludes the net income impact of other operating costs (benefit), severance and the non recurring benefit from a tax election related to certain of the Company’s foreign entities in all periods presented. Severance and other operating costs (benefit) are not considered to be non recurring, infrequent or unusual to the Company’s business, however, management believes providing investors with this information gives additional insights into Navigant’s operating performance. Although the intangible assets impairment previously discussed has not historically been as frequent as severance and office consolidation costs, we have substantial intangible assets which could become impaired in the future. While management believes that these non-GAAP financial measures are useful in evaluating Navigant’s operations, this information should be considered as supplemental in nature and not as a substitute for, or superior to, any measure prepared in accordance with GAAP.
EBITDA and Adjusted EBITDA
EBITDA (earnings before interest, taxes, depreciation and amortization) is not a measure of financial performance under GAAP. The Company believes EBITDA provides useful supplemental information for investors to evaluate financial performance. This data is also used by the Company for assessment of its operating and financial results, in addition to operating income, net income and other GAAP measures. Management believes EBITDA is a useful indicator of the Company’s financial and operating performance and its ability to generate cash flows from operations that are available for interest, debt service, taxes and capital expenditures. Investors should recognize that EBITDA might not be comparable to similarly-titled measures of other companies. Adjusted EBITDA excludes the impact of other operating costs (benefit) and severance as discussed above. This measure should be considered as supplemental in nature and not as a substitute for, or superior to, any measure of performance prepared in accordance with GAAP.
                                                                                         
    2010     2010     2009     2009     2008  
    Q4     Q3     Q2     Q1     Full Year     Q4     Q3     Q2     Q1     Full Year     Full Year  
Operating Income
  $ 4,284     $ 14,269     $ 16,885     $ 14,583     $ 50,021     $ 11,603     $ 17,716     $ 9,528     $ 12,884     $ 51,731     $ 88,754  
Depreciation
    3,575       3,528       3,553       3,801       14,457       4,288       4,352       4,320       4,640       17,600       17,302  
Accelerated depreciation - office closures included in other operating costs (benefit)
                                  175       115       387       608       1,285       2,534  
Amortization
    3,442       3,168       2,962       2,796       12,368       2,947       3,055       3,392       3,620       13,014       16,386  
Intangible assets impairment
    7,307                         7,307                                      
 
                                                                 
EBITDA
    18,608       20,965       23,400       21,180       84,153       19,013       25,238       17,627       21,752       83,630       124,976  
 
                                                                 
Add:
                                                                                       
 
                                                                                       
Other operating costs (benefit):
                                                                                       
Office consolidation (excluding depreciation above)
          (900 )                 (900 )     2,130       870       4,225       300       7,525       2,673  
Severance expense
    2,593       1,383       1,007       836       5,819       4,305       1,545       1,340       3,007       10,197       4,260  
 
                                                                 
Adjusted EBITDA (excluding other operating costs (benefit) and severance expense)
    21,201       21,448       24,407       22,016       89,072       25,448       27,653       23,192       25,059       101,352       131,909  
 
                                                                 
General and administrative expenses
    31,347       30,789       29,089       30,460       121,685       28,142       32,500       33,513       34,893       129,048       155,378  
Long term compensation expense related to consulting personnel (including share based compensation)
    3,010       2,966       2,180       2,821       10,977       1,625       3,212       2,630       3,561       11,028       12,850  
Severance expense added above
    (2,593 )     (1,383 )     (1,007 )     (836 )     (5,819 )     (4,305 )     (1,545 )     (1,340 )     (3,007 )     (10,197 )     (4,260 )
 
                                                                 
Total Segment Operating Profit
  $ 52,965     $ 53,820     $ 54,669     $ 54,461     $ 215,915     $ 50,910     $ 61,820     $ 57,995     $ 60,506     $ 231,231     $ 295,877  
 
                                                                 

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Adjusted earnings per share (adjusted to exclude the net income impact from other operating costs (benefit), severance expense and non recurring foreign tax elections)
The Company discloses adjusted earnings per share to exclude the net income impact from other operating costs (benefit), severance expense and non recurring foreign tax elections as discussed above. Management believes the adjusted earnings per share information provides additional insights into Navigant’s ongoing operating performance. This measure should be considered as supplemental in nature and not as a substitute for, or superior to, any measure of performance prepared in accordance with GAAP.
                                                                                         
    2010     2010     2009     2009     2008  
    Q4     Q3     Q2     Q1     Full Year     Q4     Q3     Q2     Q1     Full Year     Full Year  
Other operating costs (benefit) - office consolidation
  $     $ (900 )   $     $     $ (900 )   $ 2,305     $ 985     $ 4,612     $ 908     $ 8,810     $ 5,207  
Income tax (benefit) (6)
          363                   363       (930 )     (397 )     (1,860 )     (366 )     (3,553 )     (2,100 )
 
                                                                 
Net income impact of other operating costs (benefit) - office consolidation
  $     $ (537 )   $     $     $ (537 )   $ 1,375     $ 588     $ 2,752     $ 542     $ 5,257     $ 3,107  
 
                                                                 
Shares used in computing income per diluted share
    50,909       50,518       50,264       50,096       50,447       50,018       49,954       49,756       49,449       49,795       48,285  
 
                                                                 
Diluted income per share impact of other operating costs (benefit) - office consolidation
  $     $ (0.01 )   $     $     $ (0.01 )   $ 0.03     $ 0.01     $ 0.06     $ 0.01     $ 0.11     $ 0.06  
 
                                                                 
 
                                                                                       
Other operating costs (benefit) - intangible assets impairment
  $ 7,307     $     $     $     $ 7,307     $     $     $     $     $     $  
Income tax (benefit) (6)
    (1,991 )                       (1,991 )                                      
 
                                                                 
Net income impact of other operating costs (benefit) - intangible assets impairment
  $ 5,316     $     $     $     $ 5,316     $     $     $     $     $     $  
 
                                                                 
Shares used in computing income per diluted share
    50,909       50,518       50,264       50,096       50,447       50,018       49,954       49,756       49,449       49,795       48,285  
 
                                                                 
Diluted income per share impact of other operating costs (benefit) - intangible assets impairment
  $ 0.10     $     $     $     $ 0.11     $     $     $     $     $     $  
 
                                                                 
 
                                                                                       
Severance expense
  $ 2,593     $ 1,383     $ 1,007     $ 836     $ 5,819     $ 4,305     $ 1,545     $ 1,340     $ 3,007     $ 10,197     $ 4,260  
Income tax (benefit)(6)
    (1,020 )     (415 )     (371 )     (322 )     (2,128 )     (1,442 )     (480 )     (497 )     (1,170 )     (3,589 )     (1,512 )
 
                                                                 
Net income impact of severance expense
  $ 1,573     $ 968     $ 636     $ 514     $ 3,691     $ 2,863     $ 1,065     $ 843     $ 1,837     $ 6,608     $ 2,748  
 
                                                                 
Shares used in computing income per diluted share
    50,909       50,518       50,264       50,096       50,447       50,018       49,954       49,756       49,449       49,795       48,285  
 
                                                                 
Diluted income per share impact of severance expense
  $ 0.03     $ 0.02     $ 0.01     $ 0.01     $ 0.07     $ 0.06     $ 0.02     $ 0.02     $ 0.04     $ 0.13     $ 0.06  
 
                                                                 
 
                                                                                       
Net income
  $ 559     $ 9,223     $ 7,828     $ 6,447     $ 24,057     $ 4,789     $ 8,340     $ 3,385     $ 5,433     $ 21,947     $ 40,057  
Net income impact of other operating costs (benefit) - office consolidation
          (537 )                 (537 )     1,375       588       2,752       542       5,257       3,107  
Net income impact of other operating costs (benefit) - intangible assets impairment
    5,316                         5,316                                      
Net income impact of severance expense
    1,573       968       636       514       3,691       2,863       1,065       843       1,837       6,608       2,748  
Non recurring foreign tax elections
          (1,751 )                 (1,751 )                                    
 
                                                                 
Adjusted net income, excluding the net income impact of other operating costs (benefit), severance expense and non recurring foreign tax elections
  $ 7,448     $ 7,903     $ 8,464     $ 6,961     $ 30,776     $ 9,027     $ 9,993     $ 6,980     $ 7,812     $ 33,812     $ 45,912  
 
                                                                 
Shares used in computing income per diluted share
    50,909       50,518       50,264       50,096       50,447       50,018       49,954       49,756       49,449       49,795       48,285  
 
                                                                 
Adjusted earnings per share, excluding the net income impact of other operating costs (benefit), severance expense and non recurring foreign tax elections
  $ 0.15     $ 0.16     $ 0.17     $ 0.14     $ 0.61     $ 0.18     $ 0.20     $ 0.14     $ 0.16     $ 0.68     $ 0.95  
 
                                                                 
 
(6)   Effective income tax (benefit) has been determined based on specific tax jurisdiction.

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